Real terms pay falls by 2.6%

Employees' pay fell by an average of 2.6% from May to July 2022 when adjusted for inflation, according to an Office for National Statistics (ONS) report.

Average total pay is growing too slowly to keep up with soaring prices, only growing by 5.5% over the same period.

There is also a widening gap between private and public sector wage growth. Average regular pay growth was 6.0% for the private sector, while public sector wages rose by 2.0%.

The UK employment rate decreased by 0.2% for 16 to 64-year-olds from May to July, putting employment at 75.4%. The number of full-time and self-employed workers increased over the last three-month period, while part-time employment decreased.

The number of job vacancies dropped by 34,000 to 1.26 million between June and August, the most significant quarterly fall since 2020.

Greg Thwaites, research director at the Resolution Foundation, said:

"Pay settlements strengthened over the summer, but not by enough to keep up with rapidly rising inflation. As a result, pay packets have kept shrinking at close to their fastest rate since 1977.

"The only chink of light is that a more benign outlook for inflation means that they might not shrink any faster, although they won't grow for another year."

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